August 28, 2002

Canadian car dealers happier with credit providers

Westlake Village, California – According to the J.D. Power and Associates 2002 Canadian Dealer Financing Satisfaction Study released on Tuesday, a marked improvement in the interpersonal skills of the credit staff and in the speed and accuracy of processing credit applications by retail credit providers has achieved a significant increase in satisfaction among dealers in Canada.

The study finds that 83 percent of dealers are “very” or “somewhat” satisfied with their retail credit provider, a 7 percentage point improvement over 2001. Both banks and automotive manufacturer finance companies, known as captives, show improvements in retail credit performance, with 82 percent of dealers saying they are satisfied with banks and 85 percent of dealers giving a similar rating to captives.

“The banks and captives have improved their responsiveness in processing retail credit applications and in offering appropriate plans that meet very competitive market conditions,” said Mike Tamayo, manager of research projects at the J.D. Power and Associates Toronto office. “As a result, the banks have improved their satisfaction ratings by 8 percentage points over last year, while the captives have improved by 4 percentage points.”

GMAC earned top satisfaction rankings in retail credit, retail leasing and floor planning for the second consecutive year.

The 2002 study also surveyed dealers to evaluate the online capabilities of their finance providers. Almost two-thirds of dealers say they interact with them online.

“Interestingly, one-third of dealers say the extent of provider e-business capabilities has a big impact on their decision to do business with that organization,” Tamayo said. “As e-commerce continues to gain acceptance among dealers, we anticipate the online capabilities of finance providers to grow as well.”

In another of the study’s key findings, floor planning continues to be the most important area of the dealership’s business. However, while 37 percent of dealers say floor planning is their most important business area, this represents a 13 percentage-point decline in importance since 2000. Retail credit continues to gain in importance, with 27 percent of dealers saying this is their top business priority – up from 19 percent in 2000.

Based on responses from 880 dealer principals, the 2002 Canadian Dealer Finance Satisfaction Study measures satisfaction levels with finance providers in five areas: retail credit, retail leasing, wholesale leasing, floor planning and account management.

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